JOHANNESBURG (Reuters) – South Africa’s rand steadied on Thursday as investors assessed the impact of U.S. backing for protesters in Hong Kong on its trade negotiations with China, while stocks fell.
Visitors walk past a reception with an electronic board displaying movements in major indices at the Johannesburg Stock Exchange building in Sandton, Johannesburg, South Africa, August 22, 2019. REUTERS/Siphiwe Sibeko
At 1508 GMT, the rand was trading flat at 14.7500 per dollar.
Largely ignoring local signals of an increasingly weak economy and fiscal position, the rand has moved in-step with swings in sentiment driven by the tariffs tussle between China and the United States.
Beijing told Washington it would take “firm counter- measures” in response to U.S. legislation backing the anti-government protesters in Hong Kong.
U.S. President Donald Trump on Wednesday signed into law congressional legislation which supported the protesters, despite angry objections from Beijing, with which he is seeking a deal to end a damaging trade war.
“Investors are concerned about the possible impact on the trade deal as China has threatened some sort of retaliation,” said Andre Botha, senior currency dealer at TreasuryONE.
On the bourse, the benchmark JSE Top-40 index was down 0.88% to 49,470 points while the broader All-Share index fell 0.62% to 55,823.80 points.
Ferdi Heyneke, portfolio manager at Afrifocus Securities, said the weak local economy was also driving equities investors away.
“(There is) just a general negative sentiment with regards to the local economy at the moment,” he said.
Retailer Woolworths and food and retail business Bid Corporation (Bid Corp) were the biggest losers on the blue-chip index. Woolworths fell 3.39% to 52.17 rand and Bid Corp was down 3.38% to 324.66 rand.
In fixed income, the yield on the benchmark paper due in 2026 rose by 4.5 basis points to 8.475%.
Reporting by Olivia Kumwenda-Mtambo and Naledi Mashishi; Editing by Gareth Jones